Prachanda was elected by lawmakers as Nepal's Prime Minister for a second time and his elevation is expected to bring much-needed political stability in the country bogged down by deep divisions over the new Constitution.

India also has its reasons to be relieved given that it has had an anxious relationship with the Himalayan nation, under Prime Minister K P Sharma Oli, after the promulgation of a new constitution last September.

Though known to have an anti-India stance, according to observers, Prachanda seems to have softened his position and his elevation may be good for Indo-Nepal ties which experienced turbulence under Oli.

His party also signed a three-point agreement with the Madhesi Front to secure support from the Madhesi parties for their bid to form a new government led by him.